MEDIA RELEASE SENATOR THE HON NICK MINCHIN Minister for Finance and Administration Leader of the Government in the Senate Liberal Senator for South Australia

31 October 2007 94/2007

Policy on the run leaves black hole in Labor savings plans

Kevin Rudd’s desperate and hasty abandonment of savings measures has left him with a large fiscal black hole, the Minister for Finance and Administration Senator Nick Minchin said today.

“Today it was reported that Kevin Rudd made a snap decision to abandon some $2 billion of savings measures, creating an overnight black hole in Labor’s costings,” Senator Minchin said.

“Labor frontbenchers had previously claimed they would fund all new spending commitments from savings. But today it was reported that they were caught off guard by Mr Rudd’s policy on the run. Mr Rudd must now come clean as to what further secret savings he has in mind to make up for his panic move yesterday.

“An analysis of Labor’s own costings data (see attached spreadsheet) from policies released since Mr Rudd became Leader, combined with Mr Rudd’s promises in this election campaign, shows that Labor has gross new spending commitments of $8.853 billion over the forward estimates.

“If Labor’s claimed savings of $2.423 billion are subtracted from their commitments, this leaves a $6.4 billion net gap between spending and savings.

“In addition, the gap between spending and savings grows over time, so by 2010-11, Labor’s net new spending commitments amount to nearly $2.3 billion per annum.

“This analysis cannot be dismissed by the Labor Party, because it uses their own leaked data.

“It is also consistent with the Government’s existing tally of Labor spending announcements totalling more than $20 billion, because the latter includes some commitments which come to fruition after the forward estimates period, and also includes Labor’s road and water announcements, both of which are assumed to be funded from within existing programmes.

“The Labor Party is cooking up its economic policy on the run, which is not how true fiscal conservatives behave. This is no way to run a $1 trillion economy,” Senator Minchin said.